Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — Sylvania Resources — Investor Presentation (October 2010)
30 slides from Sylvania Platinum's investor presentation, October 2010
Slide 1: Leading low-risk dump and near surface PGE producer
Leading low-risk dump and near surface PGE producer TM McConnachie, CEO | October 2010 www.sylvaniaresources.com
Slide 2: Disclaimer
Disclaimer Certain forward-looking statements may be contained in this presentation which include, without limitation, expectations regarding platinum prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as t
Slide 3: Sylvania in brief
Sylvania in brief • Listed on Australian Securities Exchange (ASX: SLV) and London's AIM market (SLV) • Shares in issue: 243 million • Market capitalisation: GBP 108.2 million* • Shareholders holding 5% or more of shares in issue (+50% of equity) - Audley - M&G Investment Management - Odey Asset Man
Slide 4: Sylvania in brief
Sylvania in brief • Vision - Leading SA mid-tier PGM producer - Operate low-risk tailings and opencast mining assets • Resources - Access to 12 million ounces • Dumps - Mooinooi life of mine increased to 25 years - 5 operating plants - Additional ounces through ROM processing • Volspruit opencast re
Slide 5: Sylvania key drivers
Sylvania key drivers • Business model - High-margin, low risk tailings processing operations - Near surface exploration and mining No underground mining – opencast only - Access to downstream smelting and refining - Growth funded by strong cash flows and balance sheet • Future - 100% ownership of du
Slide 6: SamancorCr Group transaction
SamancorCr Group transaction • Africa Asia Capital Ltd (AAC) is part of the SamancorCr Group of companies • Sylvania Metals processes SamancorCr chrome dumps in terms of Services and Supply agreement • Africa Asia Capital Ltd hold a 26% shareholding in Sylvania Metals • Africa Asia Capital Ltd has s
Slide 7: Sylvania corporate structure
Sylvania corporate structure - - - - Access to 12 million ounces 7
Slide 8: Locality
© Locality SYLVANIA Besounces timiren A. LOCALITY WITHIN f f SOUTH AFRICA LOCALITY WITHIN THE BUSHVELD IGNEOUS COMPLEX i Hacra A Aurora a (H PPRust Angloplats___*s palace ’ Y { + © (Pietersburg) hee ple - Mokopane ) ° (Potgietersrus) Volspruit: SOUTH AFRICA Northern L cs tr ie enone Johannesburg LEG
Slide 9: Low risk surface operation
Low risk surface operation Target cash Chrome tailings dump cost & current arisings ~US$300/oz Chrome Chrome product recovery plant PGM flotation plant Ball mill Thickener PGM concentrate 9
Slide 10: PGM growth from tailings retreatment
PGM growth from tailings retreatment SamancorCr production decreased from 5 to 3 million tons per annum Life of Dump projects increased to 25 years to enhace NPV 10
Slide 11: Track record and profitability
Track record and profitability * Due to start up costs of three plants, will reduce to target as plants reach capacity 11
Slide 12: Track record and profitability
Track record and profitability Production sources Millsell Steelpoort Lannex Mooinooi Doornbosch 12
Slide 13: Growth focus
Growth focus Sylvania's strategy is: • To build cash generative businesses that demonstrate excellent margins placing Sylvania as one of highest margin producers in the PGM sector. • Through focused interventions and innovations ensure the plants are operated at efficiencies above industry average.
Slide 14: Opencast and near surface projects
Opencast and near surface projects • Everest North - Dispute with AQPSA in the process of being settled • Volspruit (formerly Grass Valley) - Measured resource declared - Flotation test work complete - Industry standard recoveries achieved - Smelting test work complete - Feasibility study progressin
Slide 15: Everest North
Everest North • Exploration drilling commenced June 2006 • Drilling completed 8 September 2007 • Resources estimation and competent persons report completed March 2008 • Viable mining model completed • Mining Right application of June 2009 being updated Area Grade Channel width SG Tonnes Ozs m2 g/t
Slide 16: Sylvania - AQPSA JV
Sylvania - AQPSA JV • Everest North dispute with Aquarius Platinum (South Africa) (Pty) Ltd (AQPSA) in the process of being settled • Joint venture - Sylvania mines - AQPSA process - Ounces/profit split Economic planning underway • Benefits - Reduced upfront capital - Quick return on investment - Ev
Slide 17: Volspruit project
Volspruit project Hacra and Aurora Volspruit Near surface ore body 17
Slide 18: Volspruit project ore resources
Volspruit project Ore resources • Northern ore body - 1.15 million ounces measured - 620 000 ounces indicated and inferred - At today's prices, base metals grades are equivalent to 1.27g/t (3e) making an equivalent grade of 2.49 g/t • Southern ore body Resources Tonnes 3E Cu Ni - 1.8 million ounces
Slide 19: Volspruit development schedule
Volspruit development schedule 19
Slide 20: Northern Limb development strategy
Northern Limb development strategy • Volspruit - 50 m wide ore body - Extremely low strip ratios - Low mining costs - Contract mining - Construct initial 100 000 tonne per month plant - All plants to be identical – cookie cutter model - Ultimately three plants • Hacra and Aurora projects - 25 kms of
Slide 21: Northern Platreef resource target
Northern Platreef resource target • HACRA and AURORA Projects • Wide mineralised ore zone (previously explored by SXM and Angloplats) • 25 kms of outcrop • Exploration status - Initial drilling completed - Geological model being developed - Targeted drilling once model complete - Focus on site for n
Slide 22: The Jubilee strategic alliance
The Jubilee strategic alliance • Sylvania and Jubilee have entered into strategic alliance to smelt Sylvania's platinum group metal concentrates from : – It’s tailings retreatment projects that are not tied into other contracts – Future platinum dump retreatment projects – Northern limb projects (Vo
Slide 23: Unlocking value via access to smelting technology
Unlocking value via access to smelting technology • Majors control smelting and this is an industry bottleneck • Limited room for low grade and high Cr concentrates • Require DC technology and base metal recoveries to add value to this material 94 23
Slide 24: Sylvania – growing into the future
Sylvania – growing into the future 24
Slide 25: Sylvania Ounce Production
Sylvania Ounce Production 25
Slide 26: PGM markets – positive outlook
PGM markets – positive outlook • Platinum expected to trade between $1,600 and $2,000 during the next six months • Gross demand for palladium set to rise due to stronger physical investment and some recovery in the automotive sector • Palladium expected to trade between $475 and $700 during the next
Slide 27: Attractive valuations
Attractive valuations Recent research reports • Ambrian (Nomad/ Broker); • RBC Capital Markets; • Investec Securities; • Mirabaud; • Edison Investment Research; • Evolution Securities; • Fat Prophets; • Hogan & Partners; and • Veritas Securities. Lowest cost producer Buy recommendations 27
Slide 28: Conclusion
Conclusion • Share price below most analysts’ forecasts • 5 plants fully commissioned - planned increase in ounces produced • Platinum and Palladium prices on upward trend • Chrome production upside positive as stainless steel and hence ferrochrome demand increases steadily • Sylvania is a establish
Slide 29: Investment Case
Investment Case • Business model - High margin, low costs and low risk • Future - Growth funded by robust cash flows • People - Growth orientated and experienced team • Sector - Positive PGM fundamentals • Attractive valuation 29
Slide 30: Contacts
Contacts Terry McConnachie +27 82 553 4256 UK and South Africa Louis Carroll +27 11 673 1171 South Africa Nigel Trevarthan +27 11 673 1171 30
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